CRISPR Could Change The World, But Right Now $90 Million Is Enough

There's nothing like a business development deal to give a sense of scale to a mountain of scientific hype.

That's what happened this morning, when Allergan, the eye-drug and Botox maker, signed a deal with Editas Medicine, which owns licenses to the patents for using a technology called CRISPR for creating treatments in humans. Those patents were just the subject of a big court battle, which Editas' licensors won. It was the legal brawl to determine the future of biotech!

CRISPR (short for: Clustered Regularly Interspaced Short Palindromic Repeats) is a genetic engineering tool that makes editing DNA faster, easier and cheaper. It really could change the future of humanity, allowing people to make whole species go extinct and edit the genomes of embryos. It's a big deal. But science takes time, and medicine takes more. And the first medicines being tested are gene therapies--that is, treatments that use CRISPR-containing viruses to try and edit the cells of living humans.

Allergan is paying $90 million for an exclusive right to license up to five programs, including Editas' lead effort, for a rare form of blindness called Leber Congenital Amaurosis (LCA10). All are eye diseases, which are appealing as a target for gene therapy because genetically altering a few cells in the eye can have a big impact--with little risk of the changes getting outside the eye. Editas will be eligible for undisclosed payouts on the deal. None of the programs have yet started human testing.

It's a good deal for Editas, whose stock is up almost 10%. But it should put in perspective all the CRISPR hype. These programs are worth less than $20 million each.

Umer Raffat, an analyst who covers Allergan for ISI/Evercore, an investment bank, points out to his clients that Allergan CEO Brent Saunders talked up CRISPR just two months ago, so the deal is no shock. But then Raffat adds: "It's a cool technology, but hasn't been tested in humans." Moreover, he says, the "cumulative opportunity" of the lead LCA drug is less than $2 billion. Imagining his clients would gasp, he adds: "Yes--cumulative." The market may be like that for hepatitis C, he says. There is a pool of 2,000 patients who have the disorder. Once they are treated, the market is very small.

Sometimes the coolest science and the biggest headlines don't result in the biggest deals. At least, not at first.

From June 5, 2000, until December 21, 2018, I covered science and medicine for Forbes. That took me from the Human Genome Project through Vioxx to the blossoming DNA technology changing the world today. It was an amazing run.